Tomiyasu v. Golden

• Decision Date: 30 March 1965
• Docket Number: No. 4819,4819
• Citation: 81 Nev. 140,400 P.2d 415
• Parties: Bill Yonema TOMIYASU, Klyo Tomiyasu, and Uwamie Tomiyasu, Appellants, v. Richard GOLDEN and Audrey Y. Golden, husband and wife, Respondents.
• Court: Nevada Supreme Court

Page 415

400 P.2d 415

81 Nev. 140

Bill Yonema TOMIYASU, Klyo Tomiyasu, and Uwamie Tomiyasu, Appellants, v. Richard GOLDEN and Audrey Y. Golden, husband and wife, Respondents.

No. 4819.

Supreme Court of Nevada.

March 30, 1965.

Rehearing Denied April 28, 1965.

Harry E. Claiborne, Las Vegas, for appellants.

Babcock & Sutton, Las Vegas, for respondents.

BADT, Justice.

In 1959 appellants executed a second deed of trust to Nevada Title Company to secure the payment of $13,564 to certain persons who then assigned the note and deed of trust to The First National Bank. Such deed of trust was subject and subordinate to a first deed of trust in the sum of $38,968.29. Appellants being in default of required payments under the second deed of trust, The Title National Bank, beneficiary, instructed the trustee to proceed to sell the property under the power of the second deed of trust. At the public sale, held pursuant to the required notice, the respondent Goldens bid in the property for $18,025.73. The actual amount owing The First National Bank at that time was $18,024.73.

Appellants filed action in the lower court to set aside the foreclosure sale and to cancel and annul the deed executed pursuant thereto. Respondents answered with general denials, and also pleaded as a special defense judgment in their favor in a prior action and alleged that such prior judgment was res judicata to the second action. The trial court granted a motion for summary judgment in favor of the Goldens, and the Tomiyasus appealed. The other persons are parties to the present appeal.

This matter was before this court in Golden v. Tomiyasu, 79 Nev. 503, 387 P.2d 989, decided December 23, 1963. In that action we reversed the judgment of the trial court which set aside the foreclosure sale. The purport of our opinion there was simply that mere inadequacy of price without proof of some element of fraud, unfairness, or oppression that could account for and bring about the inadequacy of price was not sufficient to warrant the setting aside of the trustee's sale on foreclosure of a deed of trust. The Goldens and the Tomiyasus on this appeal are represented by the same counsel that represented them in the former appeal.

In the former case Nanyu Tomiyasus had been an additional party to the three Tomiyasus who are the plaintiffs and appellants here.

The Goldens were the sole defendants and the successful appellants in the first suit.

In addition to the two Goldens, the following were defendants in the present case in the court below: Nevada Title Company, United Mortgage Company, Lester H. Berkson, Hector, J. St. Pierre, Merle P. Adams, David P. Boyer, and sundry fictitious defendants.

Appellants assign as error (1) the granting of the summary judgment because the defense of res judicata does not apply, as the present complaint involves a different cause of action than was sued on and litigated in the former suit; (2) that the bar of res judicata does not apply to the present complaint because of lack of identity of parties: (3) because there are genuine issues of material fact to be determined, including the issues as to the scope and coverage of the former case; (4) because respondents are estopped from raising the bar of res judicata. In these assertions appellants clarify their position by arguing that the cause of action in the first case was in equity to set aside a foreclosure sale because of irregularities in that sale and was not based upon fraud, while the complaint in the second action is for damages based entirely upon fraud. They assert that under such circumstances res judicata cannot exist by reason of numerous decisions of this court, particularly Bond v. Thruston, 60 Nev. 19, 98 P.2d 343, 100 P.2d 74; Casey v. Musgrave, 72 Nev. 31, 292 P.2d 1066; Reno Club, Inc. v. Harrah, 70 Nev. 125, 260 P.2d 304, and other cases.

In Bankers Trust Co. v. Pacific Employers Ins. Co., 282 F.2d 106, the United States Circuit Court of Appeals for the Ninth Circuit had occasion to consider the Nevada cases involving the plea of res judicata. Curiously enough, the opinion was written by Judge Orr, formerly a chief justice of this court, and concurred in by Judge Merrill, likewise a former chief justice of this court, and the author of the opinion in Reno Club, Inc. v. Harrah, 70 Nev. 125, 260 P.2d 304, and of the opinion in Casey v. Musgrave, supra. Appellants do not question the general rule as there stated:

'A judgment on the merits by a proper court operates as a bar not only as to every matter offered and received to sustain or defeat the claim, but as to every other matter which might, with propriety, have been litigated and determined in that action. Wolford v. Wolford, 1948, 65 Nev. 710, 200 P.2d 988. However, res judicata requires identical causes of action. Reno Club, Inc. v. Harrah, 1953, 70 Nev. 125, 260 P.2d 304; Weisheyer v. Weisheyer, 1932, 54 Nev. 76, 6 P.2d 439; Silverman v. Silverman, 1930, 50 Nev. 152, 283 P. 593; Smith v. Gray, 1926, 50 Nev. 56, 250 P. 369. The test of a cause of action of res judicata purposes is the identity of facts essential to maintaining the two suits; if the facts show only one right of the plaintiff and one wrong by the defendant involving that right, there is only one cause of action. The narrow bounds within which the Nevada Supreme Court has applied the doctrine of res judicata appear in Casey v. Musgrave, 1956, 72 Nev. 31, 292 P.2d 1066.'

Appellants contend that under Casey v. Musgrave, supra, it is clear that res judicata could not apply, as their first cause of action was in equity and their second cause of action was for damages based on fraud. We think there is no analogy between the two cases. Musgrave lost his first suit against Casey because he could not prove a partnership or a joint venture as alleged. His second suit was for the recovery of the value of his services rendered to the defendant. This case simply indicates that this court will not only consider whether the facts are identical in both actions, but also whether these facts show only one right of the plaintiff and one wrong by the defendant involving that right.

An examination of the pleadings in the two actions involved here casts light upon the situation.

The allegations of the complaint in the first suit were that the foreclosure sale was 'fraudulent, wrongful, illegal, void and unconscionable'; the appellants alleged (1) a number of procedural irregularities, including a defective notice of sale, defective pronouncements of postponements of the sale, and the manner in which such sale was conducted, (2) a grossly inadequate price secured, and (3) that the officers of the Nevada Title Insurance Company and the Goldens 'conspired and confederated together to sell said land at a grossly inadequate price * * * and knowing full well that there would be no public bidders present * * * and that there would be no competition in bidding, solicited the Goldens to be present and bid the exact amount due and owing on said obligation, which the Goldens did,' and knowing that the value of the property was in excess of $200,000, 'did give further aid, comfort and assistance to said conspiracy.'

Appellants quote our language in Golden v. Tomiyasu, appearing at 79 Nev. 513, 387 P.2d at 894, reciting: 'In the present case counsel for respondents, in oral argument, stated that he did not claim fraud or conspiracy but only collusion between the trustee and the high bidder. This did not exist.' (Emphasis supplied.)

We quoted Schroeder v. Young, 161 U.S. 334, 16 S.Ct. 512, 40 L.Ed. 721, referring to mere inadequacy of price as being insufficient in itself to justify setting aside a judicial sale but that it may be set aside if one of a number of conditions exist, one being 'if the sale has been collusively, or in any other manner, conducted for the benefit of the purchaser.' Finally, we held: 'Nothing in the case warrants a conclusion of collusion to defraud the Tomiyasus.' 79 Nev. at 517, 387 P.2d at 996. Webster defines 'collusion' as '1. A secret agreement and cooperation for a fraudulent or deceitful purpose; deceit; fraud. 2. Law. An agreement between two or more persons to defraud a person of his rights by the forms of law, or to obtain an object forbidden by law.'

We are then asked to distinguish the present action as one for damages growing out of fraud from the first which was simply one to set aside a foreclosure sale because of irregularities. In effect plaintiffs are saying that in the first suit they alleged only once that the foreclosure sale was fraudulent, wrongful, illegal, void, and unconscionable, that the Goldens and the Nevada Title Insurance Company conspired and confederated together to sell the land at a grossly inadequate price and that the trustee gave further aid and comfort and assistance to the conspiracy, and that the court below held only that the actions of the trustee in advising the successful bidders and by reason of their conduct and relationship with the bidders were such as to indicate a breach of the trustee's duty. As against this, appellants apparently feel that because in the present complaint they have alleged fraud, conspiracy, unlawful combination, fraud, fraudulent acts, and similar terms, some 40-odd times in their complaint, they have alleged such a tremendous fraud as did not appear in their first complaint. We are asked, as it were, to distinguish the present action from the first one because, if we place in the scales the allegations of fraud in the second complaint as against the allegations of fraud in the first complaint, the second one greatly, outweights the first. We cannot avoid the conclusion that in both actions fraud was the basis of the relief sought. As noted above, this court's holding in the first case was that nothing on the case warrants a conclusion of collusion to defraud the Tomiyasus. This included the allegation of the trustee's breach of its trust.

If we...